Home Commodities Why do we import agri-food commodities?

Why do we import agri-food commodities?

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IT has become commonplace among our policymakers and media practitioners to complain why we keep on importing our food and agricultural requirements when the Philippines is an “agricultural country.” Ostensibly, the complaint betrays ignorance on the nature of the Philippine economy.

A quick glance at official statistics regarding the composition of our economy will reveal that agriculture, fishery and forestry (AFF) contributes around 10 percent to our gross domestic product (GDP), industry and trade 30 percent, and services around 60 percent. How can a country with its agricultural sector contributing just 10 percent to the GDP be classified as a predominantly agricultural country?

But they argue that we have vast tracts of rich lands blessed with abundant supply of fresh water and hence, we should be producing all the food that we need. Again, this is not true because neighboring Thailand, Vietnam and Indonesia have territories bigger than us and their lands are served by better irrigation facilities.

Additionally, they complain that a lot of agricultural experts in Thailand, Vietnam and now, Myanmar, were educated at the University of the Philippines Los Baños (UPLB), our country’s premier institution of learning for agriculture and forestry, and yet, our neighbors have surpassed us in the agricultural development race. Unfortunately, they forgot to mention that the Thai, Vietnamese and Myanmarese graduate students from UPLB eventually became heads of their respective agricultural ministry or department. On the other hand, only three UPLB alumni (including the incumbent) were appointed to lead our Department of Agriculture (DA) for a short period of time during the entire duration of the DA’s existence. Instead, we prefer politicians to lead the most critical agency of our government rather than a competent agriculture expert.

Agri vs population growth

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In addition, it is deliberately ignored (to cast aspersion on the DA) that our population growth simply outstrips our agricultural productivity growth. Agricultural growth for almost two decades is just around 1.1 percent while our population was growing at 1.4 to 1.5 percent. In other words, we are adding more than 2 million Filipino babies annually to our population, but our agricultural land area and water supply remain constant.

To illustrate the point, both Thailand and the Philippines had the same population of around 40 million in the early 1970s. Now, Thailand has a population of only around 70 million while the Philippines nearly 110 million. Thailand’s land area is bigger by almost a half than that of the Philippines.

To make matters worse, Thailand’s government spends around an average of 4 percent of their annual budget on their agricultural sector (which has a smaller population) while the Philippines averages only 2 percent of total government budget.

It should also be pointed out that half of our agricultural budget goes to support rice-productivity enhancement programs, leaving practically insignificant amounts to the development of other basic commodities such as corn, coconut, livestock, poultry and fish.

In contrast, Thailand supports agricultural commodities on which it has a comparative advantage. And this explains why their agricultural exports are diversified. They have more than 10 agri-exports worth millions of dollars while the Philippines has only three (i.e., coconut, banana and pineapple). Thailand’s agri-exports generate almost $40 billion a year while ours is a puny sum of between $5 to $6 billion.

Food insufficiency

Despite rhetoric by our politicians about the importance of agriculture in the nation’s development effort, the reality is that it has never been accorded utmost priority in our development programs as we have seen in countries like Thailand and Vietnam. A cursory examination of projects being proposed at the National Economic Development Authority (NEDA) will reveal that hardly any project is agricultural-related. They are mostly infrastructure projects catering to the transport needs of urban and peri-urban areas of the country.

It is therefore no surprise that the last (circa 2018) food sufficiency report of the Philippine Statistics Authority (PSA) revealed that we are insufficient in most of our food requirements. For rice, total local production can only meet 87 percent; corn, 60 percent; coffee, 29 percent; onion, 62 percent; pork, 86 percent; chicken, 94 percent; garlic, 9 percent; beef, 61 percent; and round scad, 97 percent. Note that the figures are pre-Covid 19 data. Due to production and logistical bottlenecks during the height of the pandemic, it can be safely assumed that our food insufficiency situation has worsened.

Inevitably, if we are to avoid the worsening stunting, malnutrition and hunger among our people, particularly our kids, the only option we have is to import in order to tame rising prices of basic food commodities and make them available to our consumers particularly, the poor. Unfortunately, the act of importing our agri-food requirements is being treated as akin to a criminal act because of the long-standing flawed conceptions of the situation of our agricultural sector by our politicians and media practitioners constantly fed to the uninformed public.

The truth of the matter is that successive leaderships of the DA during the last 30 to 40 years have resorted to importation knowing that we are not food self-sufficient. This is the only way we can meet the food requirements of our ever-growing population, to check the rising prices of food (which contributes 43 percent to our inflation during the last 20 years), and make food affordable to our poor consumers. Note that prices of pork, chicken, rice and sugar in the Philippines is nearly twice compared to those being paid by Thai and Vietnamese consumers. No wonder that stunting, malnutrition and hunger are so high in our beloved country.

Propaganda and fake news

There are solutions to the problem that we can proffer here, but it will take another essay to justifiably elaborate on them. The point that needs to be stressed is that we need to look at the data first, the empirical evidence, before we make outlandish claims and assertions that do not contribute to the clarification of the issues but rather to their obfuscations. In turn, the shooting from the hip approach only caters to the interests of vested interest groups who try to muddle the issue because they cannot accept that their huge profit margins will shrink because of the competition posed by the entry of imported food commodities. They will rather see the vast majority of our poor consumers experience stunting, malnutrition and hunger than having their profit margins reduced.

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